0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Gold
Bearish
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Mixed
More View more
Real Time News
  • Heads Up:🇮🇳 Inflation Rate YoY (JUL) due at 12:00 GMT (15min) Expected: 6.15% Previous: 6.09% https://www.dailyfx.com/economic-calendar#2020-08-13
  • UK Chief Negotiator Frost says our assessment is an agreement can be reached in September $GBP
  • Join @CVecchioFX 's #webinar at 7:30 AM ET/11:30 AM GMT for your weekly update on the world's most influential central banks. Register here: https://t.co/xCF8skC3Bz https://t.co/nV2YhbISnj
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/2MCG036HGH https://t.co/PHVjArXYww
  • Repatriation flows for $AUD? https://t.co/vOfFPvq1Ts
  • 🇮🇪 Inflation Rate YoY (JUL) Actual: -0.4% Previous: -0.4% https://www.dailyfx.com/economic-calendar#2020-08-13
  • Indices Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.21% US 500: -0.22% Germany 30: -0.27% France 40: -0.29% FTSE 100: -0.77% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/pNdFxFzh7s
  • Triangle patterns have three main variations and appear frequently in the forex market. These patterns provide traders with greater insight into future price movement and the possible resumption of the current trend. Learn about triangles here: https://t.co/7FV2JAxssO https://t.co/qLvzxkHY8p
  • Heads Up:🇮🇪 Inflation Rate YoY (JUL) due at 10:00 GMT (15min) Previous: -0.4% https://www.dailyfx.com/economic-calendar#2020-08-13
  • 🇨🇳 FDI (YTD) YoY (JUL) Actual: 0.5% Previous: -1.3% https://www.dailyfx.com/economic-calendar#2020-08-13
Trade the News: UK Interest Rates to Rise, GBP Could Still Fall

Trade the News: UK Interest Rates to Rise, GBP Could Still Fall

2018-08-02 08:00:00
Martin Essex, MSTA, Analyst
Share:

UK interest rates and GBP analysis:

  • The Bank of England’s monetary policy committee is almost certain to increase UK interest rates to 0.75% from 0.50% today.
  • However, GBP is looking weak technically and Brexit continues to hold it back.

UK interest rates in focus Thursday

It would be a major surprise if the Bank of England’s rate-setting monetary policy committee fails to increase the benchmark UK Bank Rate to 0.75% from 0.50% today but GBP may well fall anyway. The decision is due at mid-day local time (1100 GMT), alongside the central bank’s quarterly Inflation Report, and will be followed 90 minutes later by Governor Mark Carney’s press conference, which can be watched here.

When the decision on UK interest rates is due

UK economic calendar for August 2.

DailyFX Analyst Nick Cawley will be covering the decision live at 1045 GMT. Here’s where to sign up to his webinar.

Probability of a UK rate rise

According to the overnight index swaps market, where the chances of a rate change can be calculated, the probability of a quarter-point increase is currently more than 88%

Probability of a UK rate rise on August 2.

Source: Thomson Reuters

However, the MPC has a history of failing to deliver, earning Carney the nickname “the unreliable boyfriend”, and Brexit worries combined with political turmoil in the UK could lead to a postponement. Moreover, two MPC members are likely to dissent, preferring to leave rates where they are, and as the table above shows the next rise is not fully priced in until September next year.

That could all add up to renewed downward pressure on GBPUSD.

GBPUSD Price Chart, Daily Timeframe (April 21 – August 1, 2018)

Latest GBPUSD price chart.

Chart by IG

Our trading forecasts for Q3 have been published; you can find the GBP guide here.

Trading the news: Bank of England meeting

As mentioned earlier, Brexit remains a key factor when trading GBP. The currency has fallen as the prospect of the UK leaving the EU without a deal has risen and there are concerns too about how long UK Prime Minister Theresa May will remain as Premier.

Given that Members of Parliament are currently on their Summer break, neither of these problems are likely to be resolved near-term so a respite for GBP seems unlikely even if the Bank of England delivers.

GBPUSD and EURGBP levels to watch out for

From a technical perspective, GBPUSD looks to breaking out to the downside from a symmetrical triangle pattern on the daily chart. If it does so, falls to the 1.30 “round number” are possible, and a break through there would bring the July 19 low at 1.2957 into focus.

Meanwhile, potential upside is limited by the 20-day simple moving average at 1.3149, trendline resistance at 1.3180 and the 50-day moving average at 1.3222.

As for EURGBP, that continues to trade within a rising channel and a long-term climb towards 0.90 is possible, particularly if Carney’s press conference comments are interpreted as dovish and traders decide to “buy the rumor, sell the fact”.

EURGBP Price Chart, Daily Timeframe (April 9 – August 1, 2018)

Latest EURGBP price chart.

Chart by IG

If you’d like to learn how to trade like an expert, you can read our guide to the Traits of Successful Traders. Some of the key lessons are:

- Successful traders cut losses, and let profits run,

- Successful traders use leverage effectively, and

- Successful traders trade at the right time of day.

For more help to trade profitably, check out the IG Client Sentiment data

--- Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.